The World Bank’s International Finance Corporation (IFC) division has announced the launch of a project that will see it use blockchain to register carbon removal projects and to turn carbon credits into tokens for cryptocurrency investors to speculate with.
According to reports, the project’s backers want to keep those buyers but steer them onto carbon credits which have been verified by organisations like Verra and Gold Standard. And this followed several instances of cryptocurrency enthusiasts buying carbon credits which do not do much good for the climate.
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In his response to the move, an Obama-era White House official whose company Aspiration is part-funding the project, Steve Glickman said “we haven’t seen nearly as much capital and nearly as many institutional investors… that we need to see to have the kind of impact on nature-based carbon removal and reduction strategies that are required for us to hit net zero”.
Continuing, he said “Our analysis of why that’s slow,” he said, “is that there are real questions in the marketplace around how you would do this type of carbon credits, investing in a highly credible, responsible way and so we want to build the mechanisms of methodology for doing that… and that’s where the blockchain comes in.”
Also responding, Gilles Dufrasne the police officer for a watchdog NGO called Carbon Market Watch said that this kind of transparency was “useful”.
A former CEO of Sustainable Energy for All and leads an initiative to promote integrity in carbon credits, Rachel Kyte said that Blockchain offers opportunities to build high integrity voluntary carbon markets and it is good to see IFC looking for ways to bring high integrity to many developing countries who could benefit.
Story was adapted from Climate Home News.
